[Click eStock] "BioPlus, Strong Earnings and Secured Mid- to Long-Term Growth Drivers"

[Asia Economy Reporter Kwon Jae-hee] Shinhan Investment Corp. maintained a 'Buy' rating and a target price of 36,000 KRW for BioPlus on the 15th.

BioPlus achieved consolidated sales of 14.1 billion KRW and operating profit of 6.4 billion KRW in the third quarter. This represents increases of 75.3% and 79.3%, respectively, compared to the same period last year.

By segment, HA filler sales reached 11 billion KRW, up 58% year-on-year. Although market penetration continued to expand due to the high-price strategy of SkinPlus-Hyal, growth was limited compared to the previous quarter due to seasonal off-season effects. Medical device sales were 1.4 billion KRW, a 54% increase over the same period. The strong growth in medical devices is attributed to robust domestic sales of adhesion prevention agents. Recently, BioPlus signed a new ODM (Original Design Manufacturer) supply contract for adhesion prevention agents and is understood to have secured references mainly with major domestic distributors. The operating profit margin decreased by 1.2 percentage points compared to the previous quarter, which is interpreted as a slight increase in cost ratio and selling and administrative expenses due to increased production personnel to meet demand and proactive hiring of sales staff.

High growth is expected to continue in the fourth quarter. BioPlus's consolidated sales and operating profit for the fourth quarter are estimated at 15.8 billion KRW (51.4%) and 8.2 billion KRW (76.9%), respectively. The seasonal peak is expected to result in the highest quarterly sales of HA fillers.

Won Jae-hee, a researcher at Shinhan Investment Corp., stated, "In October, BioPlus conducted a third-party allotment capital increase targeting Lindeman Asia Investment, which has a network with major pharmaceutical companies in China. Since BioPlus is preparing special import permits for HA fillers in Shanghai as well as Hainan, China, it is expected that Lindeman Asia Investment will play a role as a strategic investor." He added, "Along with this, the establishment of a U.S. JV to accelerate entry into the U.S. market and the expansion of the factory in Eumseong, Chungbuk, secure mid- to long-term growth drivers, making the investment attractiveness sufficient."